(89) Understanding Overall Equipment Effectiveness (OEE)
OEE as a term is very loosely used in in the industry and runs the risk of being misinterpreted. This post is a result of clarifying my own understanding of the term. During my research, I spoke to Joern Steinbeck who is the Founder/Managing Director at oee.ai and Managing Partner at Institute of Productivity, Achen.
Here are his thoughts:
What is OEE?
OEE is a globally accepted measure /KPI for machine productivity. This KPI answers if the machine is running at all, whether it is running in full speed and whether it produces the quality acceptable to the customer. It is measured in percentage. When you have a 100% OEE, you would produce with 100% availability, a 100% performance (desired speed), and 100% quality which means you don’t produce any faults and scrap.
OEE assigns numerical value to improvement opportunity
Where does this definition come from?
This definition comes from Total Productive Maintenance (TPM) movement. In industry, total productive maintenance (TPM) is a system of maintaining and improving the integrity of production and quality systems through the machines, equipment, processes, and employees that add business value to an organization. The term total productive maintenance is attributed to Nippondenso, a company that created parts for Toyota. The main objective of TPM is to increase the Overall Equipment Effectiveness (OEE) of plant equipment.
Help us understand the three factors, Availability, Performance, and Quality with some examples?
The three factors are best explained via the losses. The OEE calculation rolls the “6 big losses” of TPM into one number that represents the effective operating rate for a piece of equipment or synchronized line — in other words, the percent of time the equipment or line is operating effectively, or its valuable operating time. That translates to the percentage of product produced compared to what could have been produced in the scheduled time.
OEE has three factors which are multiplied to give one measure called OEE
It’s calculated like this:
OEE (%) = Availability rate × Performance rate × Quality rate
- Availability rate: It is the percentage of time the machine is ready to produce, working properly, and not in the midst of changeovers or adjustments) = Available time (scheduled operating time − downtime) ÷ Scheduled operating time.
- Performance rate: It is the ratio of output produced compared to a standard) = Actual output ÷ Standard output.
- Quality rate: It is the ratio of good output compared to actual output)= Right-first-time output ÷ Actual output.
EXAMPLE OEE CALCULATION
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